JB Insights

Diamond ETF: The path to reinvigorate natural diamond sales

Published

1 year ago

March 25, 2025

The natural diamond industry is at a critical juncture, as prices continue to plummet. The spread of cheap lab-grown diamonds is undermining the value and reputation of natural diamonds, confusing consumers who mistakenly assume that lab-grown diamonds are equivalent – just cheaper, and even more ethical.

The truth is that lab-grown diamonds mimic natural diamonds and leverage their reputation, but are not scarce and contribute relatively little to the economy. The deception threatens millions of jobs, and the value of every diamond already owned by consumers, retailers and the midstream.

If this challenge is not addressed, natural diamonds will permanently lose value. The industry needs to clearly differentiate natural diamonds from lab-grown to reinvigorate demand. Many propose to increase advertising, without identifying a source of funding. But category marketing could easily backfire in this new age of social media backlash. Consumers reject hype.

The good news is that diamond vendors and mines can restore the reputation and demand for natural diamonds by supporting an exchange traded fund (ETF) – and Diamond Standard already has approval. An ETF will quickly position diamonds as an investment asset, and unlock more sources of demand: Diamonds are the ideal asset to support Islamic finance – which prohibits the lending of money with interest – and a digital commodity currency.

This is where Diamond Standard steps in: Diamond Standard has approval to file a diamond ETF. Only one ingredient is needed – $200 million of initial assets to meet listing requirements and achieve the size needed to attract institutional investors.

The proposal: to form the initial AUM (Assets Under Management), Diamond Standard is purchasing excess inventory from mines, manufacturers and dealers in exchange for ETF shares. Post IPO, the ETF will purchase a projected $3 billion of diamonds from participating vendors.

Diamond Standard is already making diamonds an investable asset class for individuals and institutions with four different investment products including its Diamond Standard Coins, pictured above, all backed by physical natural diamonds.

The challenges facing the diamond industry today are falling demand and excess supply. Even if consumer demand improves, vendors will struggle for years as excess inventory destroys profits. By investing a small fraction of inventory into an ETF, we can unlock new demand (from investors, consumers and others) and increase the value of everyone’s remaining inventory.

For the first time ever, institutional investors can allocate to diamonds like gold and silver. Both metals were in a severe slump, and their ETFs led to an increase in prices. A diamond ETF can do the same. Investor demand is especially attractive to the diamond market – it is not seasonal like jewelry, and is proportional across all the various diamond qualities. The ETF assets can’t return to the market since investors sell their shares instead of selling diamonds. This ensures price stability and creates lasting demand.

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JB Insights

Gold Loans Fuel MSME Expansion

Industry Seminar Focuses On E-Commerce Growth, Logistics Solutions and Global Shipping Opportunities For The Gem and Jewellery Sector

Published

2 days ago

May 18, 2026

JewelBuzz Spread The Buzz

Across India, gold loans are rapidly shifting from purely personal-finance products into a go-to source of working capital and business-expansion funding for MSMEs, with non-bank lenders such as Muthoot Finance playing a central role in this transition. Record-high gold prices and easier documentation, combined with short-term tenures and relatively quick disbursal, are making gold-loan collateral attractive for small manufacturers, traders, and services-sector entrepreneurs who struggle to access traditional bank credit.

Gold loans have become a key contributor to India’s consumption-loan growth, with originations surging amid slowing personal-loan and credit-card growth and elevated gold prices improving collateral coverage.

Rating agencies and brokers note that high gold prices not only allow larger loans against the same jewellery but also help maintain asset quality, as borrowers are more incentivised to repay rather than forfeit precious metal.

Why MSMEs are turning to gold loans

Many MSME borrowers use family-held gold as collateral to finance working-capital gaps, inventory purchases, machinery upgrades, or local-market expansion, especially where cash-flow cycles are irregular or credit history is thin.
Gold loans typically offer lower interest and faster processing than unsecured personal loans or credit cards, and the presence of a tangible asset (gold) makes lenders more comfortable with shorter-tenor, higher-ticket loans.

Role of organised lenders like Muthoot Finance

Muthoot Finance and other large NBFCs explicitly position gold loans as flexible, short-term credit for “business-related” needs, including trade, small-scale manufacturing, and micro-retail, and have reported that a significant share of new disbursements go to self-employed professionals and small business-owners.
Digital-first interfaces, branch-network expansion into semi-urban and Tier-2/3 towns, and features such as missed-call status checks and mobile-based payment reminders help MSME-type borrowers manage repayments without frequent visits to branches.

Regulatory and risk-management angle

Regulators and rating agencies note that channeling gold-loan funds toward productive MSME activity can improve asset quality, as business cash flows often support repayment better than purely consumption-driven loans.
At the same time, tighter supervision on re-pledging and stricter documentation—from April 2026 onward—are pushing MSME borrowers toward organised players, reducing reliance on informal pawn-shop-style lending and improving transparency in SME-oriented gold-loan portfolios.

Market-level impact

With the organised gold-loan market expected to breach ₹15 lakh crore by March 2026, MSME-oriented lending is emerging as one of the key growth segments, particularly for NBFCs that combine branch-level trust with digital ease.
This trend is encouraging gold-loan houses to design quasi-MSME packages—such as higher ticket-sizes, flexible moratoriums around festival seasons, and payment-tracking tools—while keeping the underlying product clearly tagged as a secured gold-loan.